Financial U.S. Stock News, Beijing time, March 13, if the Dow Jones index falls more than 18.15% this week, it will be the largest weekly decline on record
If you are a bullish investor, then I believe that your feelings and That rationale may be upended this week. Because the Dow Jones Industrial Average is about to make history on Friday, it's time to get ready for one of the worst weeks ever for the stock market.
The threat of the spread of the novel coronavirus has injected a dose of unprecedented volatility into the market and a brutal shot in the arm, looking likely to result in the worst weekly decline since the blue-chip index was created in 1896. It really didn’t take too long for
to earn this honor, as the Dow Jones Index has fallen by 18.03% this week. If the decline continues on Friday and exceeds the maximum weekly decline of 18.15% during the financial crisis on October 10, 2008, then the Dow Jones will create the largest weekly decline in history of 124.
This time, the culprit for what could be a record-low drop in the Dow is the coronavirus that was first exposed in Wuhan in late December. The virus has infected 128,000 people and claimed 4,720 lives, according to data compiled by Johns Hopkins University.
What is certain is that the decline in the stock market is not solely due to the impact of the virus. There are many other factors that have also contributed to the decline of the Dow Jones Index, S&P Index and Nasdaq Index , which has caused the three major stock index futures to decline. The collective fell from a historical high into a bear market (generally defined as a bear market and a decline of at least 20% from the recent historical high) as quickly as possible. During this process, NASDAQ and the S&P took 16 trading days, and the Dow Jones Index took 19 trading days.
Of course, market analysts said that the reason for the stock index's fall was because the factors leading to the decline were uncertain. Because traders, strategists and economists cannot model this novel virus.
Also around the world, concerns about the spread of the disease known as COVID-19 have restricted everything from public gatherings, travel, professional sports outings to Broadway, but it still seems impossible to organize and it seems The impact of the epidemic is still accelerating.
In general consciousness, we believe that when the stock market is under pressure, safe-haven assets are usually considered to be safe havens. But Thursday's stock market decline overturned us, that is, Wall Street almost everything is selling off, investors seem to want to avoid not only stocks, but also bonds and gold, and just want to simply hold cash.
At the close of trading on Thursday, the price of gold futures for delivery in April on the New York Mercantile Exchange fell by 52 US dollars to close at 1,590.30 US dollars per ounce, a decrease of 3.2%, falling for the third consecutive trading day, and once touched US$1,560.40 per ounce during the session. ’s low, the lowest closing price since February 28. The yield on the 10-year Treasury note rose when it was supposed to fall. This strange trading behavior means to most people that there are very few buyers for various assets.
The Federal Reserve tried to resolve the chaos in the U.S. bond market and other markets by injecting hundreds of billions of dollars into the financial system on Thursday, but the result was greater turmoil. Because people believe that the ECB did not take the epidemic seriously, which led to Italy entering a state of total lockdown, and that they did not take sufficient measures to limit the impact of the virus on the economy, leading to extreme disappointment among market participants.
Of course, we don’t understand how the ECB’s decision not to cut interest rates came about. But one thing is clear, if there is no strong stimulus to stop the recent decline soon, it will go down as one of the worst periods in the history of the stock market.
Looking back, no economist or strategist could have predicted the current results 19 trading days ago. But it is now clear to many that an economic recession is almost inevitable. Therefore, investors appear to have accepted and even looked forward to this 11-year bull market and long-term economic expansion that will reach 12 years on June 12.
Stephen Todd, a well-known financial blogger and author of "Todd Market Forecast's" said, "So far, we have experienced bad news, and it is getting worse. But , if an effective treatment plan is suddenly announced, the Dow Jones index may rise by 3,000 points in one trading day. Perhaps it is appropriate that this week is the worst week for the Dow Jones Industrial Average, and the market should be frightened.”
AxiCorp chief market strategist Stephen. Stephen Innes wrote in a research note last Friday night, "The current market trading is crazy, including myself, I am scared when I see the fluctuations in the profit and loss statement. This may be because money is It belongs to me, not the bank. So that bank and securities firm should set an example for stabilizing the market!”
